What are Company Secretaries?

Company secretaries support the directors of a company and help companies comply with their administrative and governance requirements.

Do all companies need a company secretary?

All public companies must have at least one secretary. Private companies (e.g. Pty Ltd Companies) are not required to have a secretary, but many do.

What do company secretaries do?

Company secretaries are typically responsible for:

  • Keeping company documents and company registers up to date (see here for our article on company registers);
  • Organising meetings of directors and shareholders and recording minutes of those meetings;
  • Ensuring that meetings are run in accordance with rules set out in:
    • The Corporations Act 2001 (Cth) (the Act); and
    • Company documents like a constitution or shareholders agreement;
  • Submitting paperwork to the Australian Securities and Investment Commission (ASIC);
  • Co-signing contracts with directors;
  • Ensuring the company complies with its reporting obligations under the Act; and
  • Helping directors to establish good corporate governance practices.

What legal duties does a company secretary have?

Company secretaries have many of the same duties and obligations that directors have under the Act (see here for our article on company directors).

It is a criminal offence if a company secretary is either reckless or intentionally dishonest and fails to exercise their powers and discharge their duties in good faith in the best interests of the company, or for a proper purpose. However, it is a defence to a breach if a company secretary has taken all reasonable steps to ensure compliance.

Why would private companies appoint a company secretary?

Having a company secretary frees up the directors to focus on making decisions instead of recording them. Companies have many administrative obligations under the Act, for example, they are obliged to notify ASIC of changes to the company (like adding new directors) within specific time frames (often within 28 days). ASIC can charge late fees if this deadline is not met. Having a dedicated company secretary makes it more likely that the company will comply with administrative obligations and avoid penalties.

Also, if a company does not have a company secretary, all the directors will be responsible for any non-compliance. If a company secretary is appointed, they will take on this responsibility.

Why Would I Appoint a Company Secretary?

You can appoint a company secretary at any time. Most companies will appoint a company secretary as the business grows and managing the company becomes more complicated. Start-ups will often appoint a company secretary to help get their affairs in order before seeking external investment, or whenever their directors need support to manage the company’s administrative and governance requirements.

How are company secretaries appointed?

Company secretaries are usually appointed or removed by a resolution of the directors of the company. The directors can specify the terms and conditions of the appointment. In some cases, these terms and conditions will be set out in an employment contract. The person who is appointed must provide their written consent to act as secretary. Their signed consent should be kept in the company’s corporate register. Once appointed, ASIC needs to be notified within 28 days of the appointment.

Who can be a Company Secretary?

Anyone over the age of 18 can be a company secretary. At least one of a company’s company secretaries must ordinarily reside in Australia (large companies may have more than one). A person can be a director of a company and a company secretary at the same time. This is relatively common in start-ups and small business. Larger companies might specifically employ someone as a company secretary or appoint their in-house legal counsel as company secretary.

There is no legal requirement for a company secretary to have any particular qualifications or experience – but it is common for company secretaries to have legal qualifications, or practical experience working with boards.

Key Takeaways:

  • It’s not compulsory for private companies to have a company secretary.
  • Company secretaries can help with administrative compliance, corporate governance and reduce the risk of non-compliance and fines.
  • One person can be a director and company secretary at the same time.
  • If you appoint a secretary for your company, you must get their signed consent to act and let ASIC know.
  • A company secretary must be at least 18 years old and for a company that has one, at least one that is ordinarily resident in Australia.
  • Company secretaries have legal obligations similar to those of directors.

Next Steps…

If you have any questions regarding how or when to appoint a company secretary, please do not hesitate to get in contact with Morrissey Law & Advisory.

You can contact our specialists directly: Sally Bates s.bates@morrisseylaw.com.au & Georgia Marjoribanks g.marjoribanks@morrisseylaw.com.au.

Or use the contact links or chat box below to get in touch.

 


 

Morrissey Law + Advisory communications are only intended to provide commentary and general information as at the date of publication. They are for reference purposes only, do not constitute legal advice and should not be relied upon as such. Formal legal advice should always be obtained about particular transactions, contracts or matters of interest before taking any action based on this communication. Authors and contributors may not be admitted in all State and Territories.